Costco - AI Stock Analysis

Analysis generated December 24, 2025

Costco Wholesale Corporation is a multinational corporation which operates a chain of membership-only big-box retail stores. Established in 1983, the company has grown into one of the largest retail giants globally. Costco stands out due to its strong membership model, providing consumers with access to a wide range of high-quality goods at competitive prices. This model generates recurring revenues, fostering customer loyalty and promoting high sales volumes.

Fundamental Analysis

Costco's financial performance shows a mixture of positive and concerning signs. The revenue for the last quarter was $67.3 billion, reflecting a 21.88% decrease compared to the previous quarter. This downturn might raise concerns about short-term operational challenges. However, compared to the same quarter last year, there's an 8.30% increase, showcasing positive year-over-year growth and the company's resilience.

Net income for the last quarter came in at $2 billion, representing a 23.33% decline from the previous quarter. Similarly, this is a concern that may suggest issues with operational efficiency or higher costs. Yet, an increase of 11.29% compared to the same quarter last year indicates healthy profitability over the long term.

EBITDA for the last quarter was $3.06 billion, showing a significant 46.18% reduction from the prior quarter, indicating severe short-term profitability challenges. Nevertheless, the year-over-year growth of 11.52% demonstrates a stable and improving income trajectory.

The current P/E ratio stands at 45.87, which may be considered high, potentially indicating overvaluation. This bearish indicator is compounded by recent insider selling activity, a sign that may suggest a lack of confidence from those within the company.

Technical Analysis

Today's stock price for Costco is $875.22, marking a decrease of 1.23% over the past month. Compared to a year ago, the stock price has fallen by 8.24%, which might be a red flag for long-term investors. The trend is currently bearish.

The current Simple Moving Average (SMA10) is 858.81, which is lower than the previous SMA10 of 859.73. This suggests a potential downward trend in price movement. The Relative Strength Index (RSI) is 27.3, indicating that the stock is potentially oversold, which could be a bullish condition for opportunistic investors.

Alternative Data Analysis

Looking at job postings and employee sentiment, Costco has 25,906 open positions, up by 94% in recent months. This surge in hiring suggests that the company is looking to expand, a healthy sign for future growth. However, the business outlook among employees is currently neutral.

Customer acquisition data is also promising, with an estimated 107 million website visitors, up by 17% recently. This increase signifies a potential uptick in customer engagement and sales. While the company sees 18,000 daily mobile app downloads with stable numbers, the overall online engagement appears positive. Social media presence is also growing, with 2.1 million Instagram followers, up by 5%, indicating rising interest and engagement. Conversely, Twitter follower count remains stagnant at 87,000.

Costco's AI score, based on fundamental, technical, and alternative data analysis, stands at 63, indicating a buy signal.

Conclusion and Recommendation

In conclusion, while Costco faces short-term operational and profitability challenges, its year-over-year growth remains robust. The company's high P/E ratio and insider selling activity could be causes for concern for value investors. However, the expansion in job postings and increase in website visitors suggest that the company is poised for future growth. The technical indicators show mixed signals, with the bearish trend countered by the oversold RSI condition.

Given the combination of these factors, Costco presents a complex investment case. While there are immediate headwinds, the long-term prospects and AI buy signal suggest that it may still be a worthwhile investment for those willing to tolerate short-term volatility in favor of potential long-term gains.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.